Describe the primary alternative approaches to reviewing arbitration awards, and discuss ways those alternatives might be more or less desirable than the approach taken in Fidelity Management SA v Myriad International Holdings?

Arbitration has become an incredibly common and popular tool for parties who wish to resolve commercial disputes. Along with the lex mercatoria, arbitration has geographical benefits in that it circumvents the need for foreign parties to litigate in, what to them would appear, a foreign court within a foreign jurisdiction.[1] Arbitration is popular as it gives the disputing parties optimal control, not only can the choose the body or persons to arbitrate, but they can also elect where this arbitration is to take place.[2] The speed of such arbitration, notable from the WTO selection of arbitration as a dispute settlement mechanism, makes it even more attractive for commercial parties.[3]

 

The case of Fidelity Management SA v Myriad International Holdings[4] was followed by an even more significant decision in the House of Lords – the case of Lesotho Highlands Development Authority v Impregilo SpA.[5] Both of these cases significantly state that English courts are not to interfere with the decisions of arbitrators unless it is an extreme case. This is notwithstanding the fact that national courts in England have legislative authority to interfere with the decision of the arbitrator under the Arbitration Act 1996 where they are able to find that there was a serious irregularity or that there was a mistake as to the point of law. Commentary on this decision has commended the national court for applying a consistent and somewhat laissez-faire approach. It has been argued that such an approach allows the national jurisdiction to remain attractive to arbitrating parties which is important given the fact that such parties are able select where they wish the arbitration proceedings to take place.[6]

 

On an international scale, 146 signatories are listed as having ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention. Under the Convention, courts are required to recognise and enforce arbitration decisions. However, Article II allows a domestic court to review a decision to arbitrate, whilst Article V permits a court to decline the enforcement of an arbitration decision on the grounds of public policy. The problem here has been the fact that too much discretion has been left to the signatory to elect how far this discretion is to be used – this somewhat detracts from certainty.[7]

 

A recent US decision illustrates how some national courts are not as keen to allow arbitration decision to stand without scrutiny. Republic of Argentina v BG Group PLC.[8] is a case in which the court overturned an arbitration decision for lack of authority. The decision sparks concern as to the level of certainty in decisions being upheld and has been deemed unattractive for states to wholesale adopt given the reputation impacts it can have.[9]



[1] Harold Berman and Colin Kaufman, ‘The Law of International Commercial Transactions (Lex mercatoria)’ (1978) 19(1) Harvard International Law Journal 221, 225.

[2] Anita Alibekova and Robert Carrow, International Arbitration and Mediation: From the Professional's Perspective, (Lulu, 2007), 110.

[3] Guohua Yang, WTO Dispute Settlement Understanding: A Detailed Interpretation, (Kluwer Law Interntaional. 2005), 272.

[4] [2005] 2 Lloyd's Rep. 508.

[5] [2006] 1 A.C. 221 (HL).

[6] Camilla Macpherson ad Chris Mainwaring-Taylor, ‘Final and binding? Challenges under the Arbitration Act 1996, Section 69’ (2006) 72(2) Arbitration, 119, 123.

[7] William Park, ‘Why Courts Review Arbitral Awards’ (2001) Festschrift für Karl-Heinz Böckstiegel 595, 601.

[8] 665 F.3d 1363 (DC Cir 2012).

[9] Catherine M Amirfar and David W Rivkin, ‘Who Decides Arbitrability? A Resurgence of the Debate in the United States’, (2013) The Arbitration Review of the Americas, Section 2.



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